MQ Associates, Inc. Announces Results for the Third Quarter and Nine Months Ended September 30, 2007

... ALPHARETTA Ga. Nov. 7 /- MQ Associates I...Net revenue was $59.8 million for the third quarter 2007 representing...Income from operations was $1.1 million for the third quarter 2007re...Capital expenditures excluding payments for capital equipment undero...

ALPHARETTA, Ga., Nov. 7 /PRNewswire-FirstCall/ -- MQ Associates, Inc.
("MedQuest"), a leading national provider of diagnostic imaging services,
today announced its results for the third quarter and nine months ended
September 30, 2007.

Net revenue was $59.8 million for the third quarter 2007, representing
a decrease of $8.1 million, or 11.9%, from net revenue of $67.9 million for
the third quarter 2006. Net revenue was $186.5 million for the nine months
ended September 30, 2007, representing a decrease of $22.2 million, or
10.6%, from net revenue of $208.7 million for the nine months ended
September 30, 2006. For the third quarter 2007 and nine months ended
September 30, 2007, the decrease in net revenue was driven in large part by
lower scan volumes and Medicare reimbursement reductions under the Deficit
Reduction Act of 2005.

Income from operations was $1.1 million for the third quarter 2007,
representing a decrease of $7.7 million, or 87.8%, from income from
operations of $8.8 million for the third quarter 2006. Income from
operations was $3.5 million for the nine months ended September 30, 2007,
representing a decrease of $13.9 million, or 79.7%, from income from
operations of $17.4 million for the nine months ended September 30, 2006.

Capital expenditures, excluding payments for capital equipment under
operating leases, were $0.1 million for the third quarter 2007 compared to
$7.9 million for the third quarter 2006, and $7.6 million for the nine
months ended September 30, 2007, compared to $19.5 million for the nine
months ended September 30, 2006. Cash used in operating activities was
$10.7 million for the nine months ended September 30, 2007, compared to
cash provided by operating activities of $11.8 million for the nine months
ended September 30, 2006. The decrease was primarily due to an increase in
the net loss of $15.3 million for the nine months ended September 30, 2007
and a decrease in cash flows provided by working capital assets and
liabilities.

Adjusted EBITDA, which is defined below, was $8.0 million for the third
quarter 2007, a decrease of $9.5 million, or 54.2%, compared to $17.5
million for the third quarter 2006. Adjusted EBITDA was $25.9 million for
the nine months ended September 30, 2007, representing a decrease of $19.4
million, or 42.9%, compared to $45.3 million for the nine months ended
September 30, 2006. Adjusted EBITDA, as defined by MedQuest, is net income
plus (a) interest expense, net, (b) income taxes, (c) depreciation and
amortization, (d) non- cash expenses and (e) audit committee review and
other charges. For a more detailed discussion of Adjusted EBITDA and
reconciliation to net loss, see the "Adjusted EBITDA" table at the end of
this release.

Selected Financial Data

The following tables set forth selected financial data derived from
MedQuest's unaudited financial statements filed with its Quarterly Report
on Form 10-Q for the quarterly period ended September 30, 2007 and audited
financial statements filed with its Annual Report on Form 10-K for the year
ended December 31, 2006.

Condensed Consolidated Balance Sheets (in thousands)

September 30, December 31,

2007 2006

Assets

Cash and cash equivalents $3,024 $4,601

Patient receivables, net of allowances 31,009 24,963

Other current assets 5,127 5,000

Total current assets 39,160 34,564

Property and equipment, net 62,849 77,432

Other assets 61,989 63,438

Total assets $163,998 $175,434

Liabilities and Stockholders' Deficit

Other current liabilities $24,369 $34,212

Current portions of long-term debt

and capital leases 1,669 1,478

Total current liabilities 26,038 35,690

Long-term debt and capital leases 367,676 340,445

Other liabilities 12,584 10,604

Total liabilities 406,298 386,739

Redeemable preferred stock 70,000 70,000

Total stockholders' deficit (312,300) (281,305)

Total liabilities and stockholders'

deficit $163,998 $175,434

Condensed Consolidated Statement of Operations (in thousands)

Third Quarter Ended Nine Months Ended

Sept. 30, Sept. 30,

2007 2006 2007 2006

Net revenue $59,809 $67,878 $186,483 $208,700

Costs of services 30,311 29,929 91,926 94,137

MG&A expenses 22,094 23,091 69,420 72,439

Loss (gain) on

disposal of assets 65 (2,255) 299 (754)

Gain on sale of

partnership interest (524) -- (524) --

Depreciation and

amortization 6,791 8,336 21,826 25,485

Income from

operations 1,072 8,777 3,536 17,393

Interest expense, net 11,231 10,558 33,163 31,346

Equity in earnings of

unconsolidated joint

ventures (71) (61) (155) (177)

Provision for income

taxes 343 530 1,119 1,479

Net loss $(10,431) $(2,250) $(30,591) $(15,255)

Adjusted EBITDA

This press release contains a discussion of Adjusted EBITDA, which,
according to applicable Securities and Exchange Commission ("SEC") rules,
is a "non-GAAP financial measure" of MedQuest's historical performance that
is different from measures calculated and presented in accordance with
GAAP. MedQuest defines Adjusted EBITDA as net income plus (a) interest
expense, net, (b) income taxes, (c) depreciation and amortization, (d)
non-cash expenses and (e) audit committee review and other charges.
Adjusted EBITDA as calculated by MedQuest is not necessarily comparable to
similarly titled measures by other companies. In addition, Adjusted EBITDA
(a) does not represent net income or cash flows from operations as defined
by GAAP, (b) is not necessarily indicative of cash available to fund
MedQuest's cash flow needs, and (c) should not be considered as an
alternative to net income, operating income, cash flows from operating
activities or MedQuest's other financial information as determined under
GAAP.

Management uses Adjusted EBITDA in its internal analysis of operating
performance and monitors it to ensure compliance with certain maintenance
and debt incurrence covenants under MedQuest's senior credit facility,
which is described in more detail in MedQuest's Annual Report on Form 10-K
for the year ended December 31, 2006 and other periodic reports. Management
believes that Adjusted EBITDA provides useful information to investors for
meaningful comparison to prior periods and analysis of critical components
of results of operations, since it allows investors to compare the
company's ongoing performance before the effect of various items that do
not directly affect the company's ongoing financial performance. Management
also believes that disclosure of Adjusted EBITDA is valuable to investors
because it allows them to monitor a key component of maintenance and debt
incurrence covenants that determine MedQuest's compliance with, and its
ability to incur further indebtedness under, its senior credit facility.

A reconciliation from net loss to Adjusted EBITDA, as defined by
MedQuest, is shown below (in thousands):

Third Quarter Ended Nine Months Ended

Sept. 30, Sept. 30,

2007 2006 2007 2006

Net loss $(10,431) $(2,250) $(30,591) $(15,255)

Interest expense, net 11,231 10,558 33,163 31,346

Provision for income

taxes 343 530 1,119 1,479

Depreciation and

amortization 6,791 8,336 21,826 25,485

EBITDA 7,934 17,174 25,517 43,055

Non-cash expenses(1) 76 249 345 1,994

Audit Committee

review and other

charges(2) -- 75 -- 224

Adjusted EBITDA $8,010 $17,498 $25,862 $45,273

(1) MedQuest incurred a non-cash loss of approximately $0.1 million

related to the disposal of assets for the third quarter 2007 as

compared to $0.2 million loss on disposal of assets for the third

quarter 2006. MedQuest incurred a non-cash loss of approximately

$0.3 million related to the disposal of assets for the nine months

ended September 30, 2007, as compared to $1.7 million loss on disposal

of assets in the nine months ended September 30, 2006, the majority of

which were driven by closed centers. MedQuest incurred approximately

$0.0 million of non-cash expenses for the third quarter of 2007 and

2006. MedQuest also incurred approximately $0.0 million and

$0.2 million of non-cash expenses in the nine months ended

September 30, 2007 and 2006, respectively, primarily for exit

activities related to those closed centers.

(2) MedQuest incurred approximately $0.2 million of non-recurring cash

expenses in the nine months ended September 30, 2006, related to the

SEC's formal inquiry concerning, among other things, MedQuest's

previous announcement that it expected to restate its financial

statements for prior periods and its inability to timely file its

Annual Report on Form 10-K for the year ended December 31, 2004 and

its Quarterly Reports on Form 10-Q for the quarters ended March 31,

and June 30, 2005, which were filed in September and November 2005,

respectively, and the U.S. Attorney's Office investigation relating to

the resignation of MedQuest's former executive officers and its

announcements that it expected to restate certain of its financial

statements for prior periods.

About MQ Associates, Inc.

MQ Associates, Inc. is a holding company and has no material assets or
operations other than its ownership of 100% of the outstanding capital
stock of MedQuest, Inc. MedQuest, Inc. is a leading operator of
independent, fixed- site, outpatient diagnostic imaging centers in the
United States. These centers provide high quality diagnostic imaging
services using a variety of technologies, including magnetic resonance
imaging (MRI), computed tomography (CT), nuclear medicine, general
radiology, bone densitometry, ultrasound and mammography. MedQuest, Inc.
operates a network of 92 centers in thirteen states located primarily
throughout the southeastern and southwestern United States.

Forward-Looking Statements

This press release contains or may contain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
Such statements include, without limitation, statements regarding
MedQuest's future growth and profitability, growth strategy and trends in
the industry in which it operates. These forward-looking statements are
based on MedQuest's current expectations and are subject to a number of
risks, uncertainties and assumptions. MedQuest can give no assurance that
such forward-looking statements will prove to be correct. Among the
important factors that could cause actual results to differ significantly
from those expressed or implied by such forward-looking statements are its
previously announced merger agreement with Novant Health, Inc., general
economic and business conditions, the effect of healthcare industry trends
on third-party reimbursement rates and demand for its services, limitations
and delays in reimbursement by third- party payors, changes in governmental
regulations that affect its ability to do business, actions of its
competitors, introduction of new technologies, risks associated with its
acquisition strategy and integration costs, and the additional risk factors
contained in MedQuest's Annual Report on Form 10-K for the year ended
December 31, 2006, as well as its other periodic reports filed with the
SEC.

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